Ubs AG 6-K, filed May 9, 2025
Ubs AG (AMUB)
6-K
2025-05-09
For: 2025-04-30
View Original
Added on
April 06, 2026
About this 6-K
Ubs AG filed this 6-K on May 9, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
Date: April 30, 2025
UBS Group AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
(Address of principal executive office)
Commission File Number: 1-36764
UBS AG
(Registrant's Name)
Bahnhofstrasse 45, 8001 Zurich, Switzerland
Aeschenvorstadt 1, 4051 Basel, Switzerland
(Address of principal executive offices)
Commission File Number: 1-15060
Indicate by check mark whether the registrants file or will file annual reports under cover of Form
20-F or Form 40-
F.
Form 20-F
☒
☐
This Form 6-K consists of the transcripts of the 1Q25 Earnings call remarks and Analyst Q&A, which
appear immediately following this page.
1
First quarter 2025 results
30 April 2025
Speeches by
Sergio P. Ermotti
, Group Chief Executive Officer, and
Todd Tuckner
,
Group Chief Financial Officer
Including analyst Q&A session
Transcript.
Numbers for slides refer to the first quarter 2025 results presentation. Materials and a webcast
replay are available at www.ubs.com/investors
Sergio P. Ermotti
Slide 3 – Key messages
Thank you, Sarah and good morning, everyone.
Our strong results in the first quarter demonstrate once again our ability to deliver for stakeholders in different
market conditions.
The quarter was characterized by a substantial shift in investor sentiment and growth expectations, alongside
periods of significant market volatility. This dampened the positive seasonal effect we typically experience at the
start of the year, and tempered the bullish outlook the market had coming out of 2024, and into the first few
weeks of January.
Against this backdrop, these results reflect the power and scale of our diversified global franchise, our unwavering
commitment to clients, disciplined cost management and the substantial progress made in integrating Credit Suisse.
All this is underpinned by a balance sheet for all seasons.
First-quarter net profit reached 1.7 billion, and our underlying return on CET1 capital stood at 11.3%, supported
by positive operating leverage in our core businesses.
Net new inflows onto our asset-gathering platform were robust, including 32 billion in net new assets in Global
Wealth Management and 7 billion net new money in Asset Management. Although we haven’t seen a major
strategic shift in asset allocation, the breadth and depth of our advice and global capabilities helped clients protect
their wealth and navigate the market volatility.
We saw significant demand for mandate solutions, structured products and Alternatives, including new offerings
within our Unified Global Alternatives unit, where total assets reached nearly 300 billion. For our clients in
Switzerland, we kept delivering on our commitment to be a reliable partner. During the quarter, we granted or
renewed 40 billion Swiss francs of loans.
In the Investment Bank, we continue to execute on our capital-light strategy. The investments we made in our areas
of strategic importance allowed us to win further market share. Global Markets achieved its best quarter on record.
In Global Banking, we outperformed the fee pools in M&A and ECM, despite a challenging market backdrop. I am
also pleased to see that we are building on our already-healthy pipeline.
2
As the second quarter kicked off, the unveiling of significant changes to tariffs on trading partners by the U.S.
administration increased uncertainty and market volatility, while in some days, trading volumes exceeded their
Covid-era peak by around 30%.
I am especially pleased by the way our colleagues were able to intensify their engagement with institutional and
private clients during this period. The investments we’ve made to reinforce our infrastructure are paying off, with
our operations proving stable and resilient as we facilitate client activity across asset classes.
Looking ahead, the economic path forward is particularly unpredictable, and the range of possible outcomes is
wide. The prospect of higher tariffs on global trade presents a material risk to global growth and inflation. While
we are encouraged that negotiations are ongoing, a prolonged period of discussions and speculation will come at
a cost. Uncertainty is likely to affect sentiment and lead businesses and investors to delay important decisions on
strategy, capital allocation and investment.
In this environment, we expect financial markets to remain sensitive to new developments, both positive and
negative, which are likely to lead to further spikes in volatility. In light of this, we are unwavering in serving our
clients, executing on our growth strategy and following through on our integration plans.
On that, over the course of the first quarter, we finalized our preparations to migrate more than one million clients
in Switzerland onto UBS platforms and continued to integrate 95 petabytes of data. We moved a small pilot group
of clients at the start of April and we are on track to complete the first main wave of migrations by the end of the
second quarter.
We are pleased with our progress in Non-core and Legacy as we continue to reduce the complexity of our operations
through book closures and the decommissioning of applications. Moreover, our active wind-down efforts have
proven so effective that we have been able to upgrade our credit and market risk-weighted asset ambitions for
2025 and 2026.
Our CET1 capital ratio stands in line with our guidance at 14.3%. This, combined with the substantial de-risking of
the acquisition and our highly capital-generative strategy, gives us confidence in our ability to deliver on our 2025
capital return objectives. These remain contingent on maintaining a CET1 capital ratio of around 14% and the
absence of material, immediate changes to the current capital regime. Our capital strength also supports our ability
to deploy investments that reinforce our leadership across the globe and position UBS for the future.
We are working to further enhance our client offering and capabilities to improve profitability in the Americas. At
the same time, we are building on our status as the number-one wealth manager in APAC by scaling our offering
in the fastest growing markets across the region, while reinforcing our leadership position in EMEA and Switzerland.
As highlighted in February, technology investments are a key enabler for growth. We are encouraged by our
development and adoption of generative A.I. solutions as we empower our colleagues with tools to improve
productivity and deliver tailored solutions to clients.
In closing, we are pleased with our strong performance this quarter and continue to operate from a position of
strength. But we are not complacent, as we are only around two-thirds of the way to restoring UBS’s pre-acquisition
levels of profitability. In that sense, the next phase of the integration is especially important to harvesting the full
benefits of the acquisition for our clients and shareholders, and delivering on our long-term ambitions. In the
meantime, we are staying focused on what we can control: serving our clients, delivering on our financial targets
and continuing to act as an engine of economic growth in the communities we serve.
With that, I hand over to Todd.
3
Todd Tuckner
Slide 5 – 1Q25 profitability driven by positive operating leverage in core business divisions
Thank you Sergio, and good morning everyone.
Throughout my remarks, I’ll refer to underlying results in US dollars and make year-over-year comparisons, unless
stated otherwise.
During the first quarter of 2025 our core businesses grew their combined pre-tax profitability by 15% on strong
positive operating leverage. Overall, our Group profit before tax was 2.6 billion, down 1% year-on-year. Group
revenues were broadly flat at 12 billion and up 6% across our core franchises. Operating expenses were also stable
at 9.2 billion, as we continued to successfully reduce our non-production-related costs across the Group, offsetting
higher financial advisor and variable compensation accruals in the quarter.
Our EPS was 51 cents and we delivered an 11.3% return on CET1 capital and a cost/income ratio of 77.4%.
Slide 6 – 1Q25 demonstrates the strength of our diversified business model
As illustrated on slide 6, this quarter’s underlying performance demonstrates the strength of our franchise and
diversified business model, particularly in challenging and complex markets.
By supporting clients in ways that differentiate UBS, while maintaining a sharp focus on cost and resource efficiency,
each of Global Wealth Management, Asset Management and the Investment Bank achieved double-digit pre-tax
growth, absorbing net interest income headwinds that in particular weighed on our Personal and Corporate
Banking business. Our Non-core and Legacy unit delivered a strong first quarter, although short of the exceptional
results of last year’s 1Q.
On a reported basis, our pre-tax profit of 2.1 billion included 700 million of revenue adjustments from acquisition-
related effects and 1.1 billion of integration expenses.
Our effective tax rate in the quarter was 20%. For 2Q, we expect a tax rate of around zero due to a capital-neutral
tax credit from further legal entity streamlining in the US and from other planning measures related to the
integration. We continue to expect our full-year 2025 effective tax rate to be around 20%, with a second-half tax
rate of around 30% influenced by NCL’s reported pre-tax performance.
Slide 7 – Achieved 65% of gross cost save ambition, on track to ~13bn by year-end 2026
Turning to our cost update on slide 7.
In the first three months of 2025, we achieved an additional 900 million in gross run-rate cost saves, bringing the
cumulative total since the end of 2022 to 8.4 billion, or around 65% of our total gross cost save ambition.
By quarter-end, we had nominally decreased our overall cost base by around 10% from our 2022 baseline. Yet
looking-through variable compensation and litigation, and neutralizing for currency effects, we delivered an even
greater net reduction in underlying expenses, exceeding 20%. As a result, more than 50% of our cumulative gross
cost saves have translated into net saves that benefit our run-rate.
The overall employee count fell sequentially by 2%, to 126 thousand, and by around 20% from our 2022 baseline.
4
As I’ve highlighted in the past, one of the keys to meeting our target cost-income ratio by the end of 2026 is
shutting down legacy Credit Suisse technology applications and infrastructure. To date, we’ve retired over a third
each of these applications, computer servers and data centers that are targeted in our plans for decommission.
These actions have generated more than 700 million in technology cost saves, with Non-core and Legacy’s balance
sheet reduction a key driver of this progress.
We expect that most of the remaining 4.5 billion in gross saves required to achieve our 13 billion target will come
from reductions in technology, staffing and vendor costs. As an example of what’s to come in the technology
context is a run-rate cost save of 800 million related to Credit Suisse’s legacy applications in the Swiss booking
center, which we’ll decommission after the completion of the client account migration in 2026.
Slide 8 – Our balance sheet for all seasons is a key pillar of our strategy
Turning to slide 8. As of the end of the first quarter, our balance sheet for all seasons consisted of 1-and-a-half
trillion in total assets, with around 615 billion in loan balances, 745 billion in deposits, and a loan-to-deposit ratio
of 80%.
The strength of our balance sheet is not just an essential component of our strategy, but a competitive advantage
and source of confidence for our clients, especially during times of uncertainty.
A fundamental driver of our balance sheet strength is our credit book. 93% of our lending positions are
collateralized, with 57% of the total balance consisting of mortgages where the average LTV is 50%.
At the end of March, our lending book reflected credit-impaired exposures of 1%, unchanged from the prior
quarter. The cost of risk decreased to 7 basis points as we recorded Group credit loss expenses of 100 million,
reflecting 121 million of net charges on credit-impaired positions and 21 million of net releases across our
performing portfolio. The net releases were due to our recalibration of the expected credit loss scenarios and
rebalancing of the factor weights.
Onto liquidity and funding. In the quarter, we made strong progress on our 2025 funding plan, already having
completed our AT1 issuances intended in 2025, in addition to having issued 3 billion in HoldCo debt. I would
highlight that our funding stability is underscored by the balanced currency mix across our assets and diversified
sources of long-term funding and deposits.
Our average LCR was 181%, and remained around this level throughout April’s volatile markets.
5
Slide 9 – Maintaining a strong capital position with CET1 capital ratio at 14.3%
Turning to capital on slide 9. Our CET1 capital ratio at the end of March was 14.3%.
As a result of our continued progress with the integration, coupled with strong financial performance in the first
quarter, it is now our intention to execute on all of our 2025 capital return ambitions announced in February.
Consequently, our CET1 capital not only accounts for the 500 million in shares repurchased during the first three
months of the year, but it also reflects the accrual of the remaining 2 and a half billion share buyback we intend to
execute through the rest of 2025, of which 500 million in the second quarter.
Risk-weighted assets fell by 15 billion sequentially, driven by lower asset size and the implementation of the final
Basel III standards, which ultimately resulted in a net reduction of 9 billion in RWA.
This revised amount reflects further infrastructure and data quality improvements finalized during the quarter, as
well as the effects of additional mitigation and de-risking actions we took across various credit, counterparty and
market risk categories. After receiving regulatory approval, the final operational risk-weighted asset level also came
in around 2 billion lower than our February estimate. Netted within the overall reduction, FRTB led to an increase
of 6 billion, mainly related to the Investment Bank.
At the same time, despite the offsetting effects of mitigating actions, our leverage ratio denominator was 42 billion
higher sequentially, resulting in a CET1 leverage ratio of 4.4%.
The uplift in LRD was driven by an increase of 29 billion from derivatives exposures now calculated under the revised
Basel III standardized approach for counterparty credit risk. With FX accounting for a 27 billion increase in the
quarter, these factors more than offset asset size reductions of 13 billion.
A word on parent capital and Group equity double leverage. As of the end of March, our parent bank’s standalone
CET1 capital ratio on a fully applied basis is expected to be 12.9%, within our target range. The sequential reduction
reflects an accrual for dividends intended to be paid in 2026. Over the next few quarters, the parent bank’s
dividend-paying capacity is expected to be supported by both dividends and capital repatriations from subsidiaries.
In addition, earlier this month, as expected UBS AG paid a 6.5 billion ordinary dividend to our holding company.
Taking into account capital returns to shareholders completed or anticipated during the first half of the year, we
expect the Group’s equity double leverage ratio to improve to around 110% by the time we publish our Group
stand-alone accounts at the end of the second quarter.
These actions are consistent with our intention to restore the Group’s equity double leverage ratio towards pre-
acquisition levels over the next several quarters.
Slide 10 – Global Wealth Management
Turning to our business divisions, and starting with Global Wealth Management on slide 10.
GWM’s pre-tax profit was 1.5 billion, up 21% year-over-year as revenue growth outpaced expenses by 5
percentage points. This translated to a year-over-year improvement in GWM’s cost-income ratio of over 3
percentage points to 75%.
6
In Asia, with our integration efforts now largely complete, we’re well-positioned to deliver our full range of
capabilities to our clients. Notably, our APAC franchise drove excellent PBT growth of 36%, on 14 points of positive
operating jaws and a pre-tax margin of over 40%. In the Americas, where we’re executing on our growth plans,
we delivered PBT growth of more than 40% and a pre-tax margin of 12%. In addition, each of our Switzerland
and EMEA regions grew profits by 7% in the quarter.
You can find additional regional details, including a breakdown of revenue lines, credit loss expenses, net new
deposits, and customer deposit balances, as well as comparatives across our four wealth regions, in our newly
enhanced disclosure in the quarterly report and on page 22 in the appendix to this presentation.
Onto flows. GWM invested assets increased by 1% sequentially with favorable currency effects and positive asset
flows offsetting negative market performance. Net new assets in the quarter reached 32 billion, representing a 3%
annualized growth rate with growth in all regions, led by the Americas, where strong same store performance
supported NNA of 20 billion. Our flow performance again this quarter reflects the actions I’ve highlighted in the
past regarding balance sheet optimization that support higher pre-tax margins and returns on attributed equity,
but at times come at the expense of net new assets.
For example, we again successfully managed the roll-off of preferential fixed term deposits associated with our
2023 win-back campaign. Of the 54 billion in deposits maturing in 1Q, as in prior periods we converted around
85% into more profitable liquidity and investment solutions. But some less profitable flows left the platform. You
can see the clear improvement we’ve achieved in enhancing profitability from these balance sheet actions in GWM’s
revenue over RWA ratio, which has grown 2 points year over year, and has reattained pre-acquisition levels.
Further evidence of clients seeking our market-leading advice and solutions and helping drive sustainable revenue
growth is underscored by our net new fee generating asset performance of 27 billion in the quarter, a 6%
annualized growth rate. We saw continued momentum in discretionary mandates, including SMAs in the US and
our signature MyWay solution, delivered through our Swiss and international platforms. MyWay mandates have
grown to 20 billion, up almost 80% from the prior year quarter.
NNFGA growth was especially strong in our APAC franchise at an annualized growth rate of 10%, with mandate
penetration at its highest level on record.
Looking ahead to the second quarter, while maturing fixed-term deposits are becoming a less material headwind
to flows, seasonal US tax-related outflows in the high single-digit billion range, elevated as a result of last year’s
strong market performance, are expected to weigh on GWM’s 2Q net new assets.
I would also highlight that we saw a modest pick-up in lending across the wealth business, with client re-leveraging
supported by a lower rate environment. Net new loans were 2.2 billion, driven by Lombard lending in APAC.
Turning to revenues. GWM’s top line increased by 6%, driven by elevated client engagement, increased solution
take-up by clients seeking diversification across geographies and asset classes, and higher average-asset levels.
Recurring net fee income increased by 8% to 3.3 billion from positive market performance and over 70 billion in
net new fee-generating assets over the past 12 months. Margins continued to hold up sequentially and are expected
to remain around these levels, especially as recently migrated clients and those remaining on the Credit Suisse
platform now have access to the full breadth of our CIO value chain-led capabilities and solutions.
7
Transaction-based income increased by 15% to 1.4 billion, in a market environment where our franchise’s enduring
advantages set us apart. Without a major shift in asset allocation during the quarter, clients nevertheless actively
repositioned portfolios, benefitting from our investments in capabilities, solutions, and unified teams. This drove
double-digit growth across Structured Products and Cash Equities, with Wealth Planning and Life Insurance up by
more than 50%. Alternatives were up 40%, fueled by the joint Unified Global Alternatives initiative with Asset
Management.
Regionally, we saw a continuation of transactional growth spanning the wealth franchise, led by APAC and the
Americas, where transactional revenues increased by 28% and 16%, respectively.
Net interest income at 1.5 billion was down 4% year-over-year and 7% quarter-over-quarter, with the sequential
trend reflecting a lower day count and headwinds from declining rates in Swiss franc and euro, partially offset by
ongoing balance sheet optimization efforts.
Of the sequential decline, 1 percentage point reflects a change to our client segmentation approach between GWM
and P&C that we implemented in February, but was not included in our guidance. This change led to a shift of
some affluent clients from GWM to P&C, including loan balances of 8 billion. Despite the modest effect on NII, we
ultimately decided to not restate our accounts for this transfer, given the immaterial impact to the P&L of both
divisions overall.
Now to our NII outlook. For the second quarter of 2025, we expect GWM’s net interest income to decrease
sequentially by a low-single digit percentage, despite day count helping, primarily from lower Swiss franc and euro
rates after the March cuts. We also expect a seasonal decline in client deposits following April tax payments in the
US, although there could be upside should clients maintain a more defensive posture amid ongoing market
uncertainty, driving higher sweep and account balances.
For full year 2025, we continue to expect GWM’s net interest income to decrease by a low single-digit percentage
compared to 2024.
Underlying operating expenses were up by 1%, with lower personnel and support costs offset by higher variable
compensation tied to revenues. Looking through variable compensation, litigation and currency effects, costs were
down 5% year-over-year.
Slide 11 – Personal & Corporate Banking (CHF)
Turning to Personal & Corporate Banking on slide 11, where my comments will refer to Swiss francs.
P&C delivered first quarter pre-tax profit of 597 million, down 23% as lower interest rates led to an 18% reduction
in net interest income.
Recurring net fee income increased by 3% driven by record volumes of investment products in Personal Banking,
supported by strong sales momentum, including a 12% annualized growth rate in net new investment flows in the
first quarter. Transaction-based revenues decreased by 2% as strong performance in Personal Banking was more
than offset by the effect of lower corporate finance activity amid softer economic conditions.
Sequentially, NII decreased by 7% largely reflecting the effects of the SNB’s 50-basis point rate cut announced in
December and a lower day count, partly offset by the effect of the client segmentation shift between GWM and
P&C that I mentioned earlier, which provided a 1-percentage-point quarter-on-quarter uplift to P&C. To mitigate
the effects of lower rates, we adjusted deposit pricing on select products and continued optimizing our banking
book.
8
Looking to the second quarter, we see a sequential decrease in the low single-digit percentage range for P&C’s NII
in Swiss francs, which translates to a sequential mid single-digit percentage increase in US dollar terms, based on
current FX rates. The outlook is driven by last month’s SNB 25-basis point rate cut, despite day count helping, and
the latest change to the SNB’s threshold factor for remunerating sight deposits.
For full year 2025, we continue to expect an NII decline of around 10% versus 2024 in Swiss francs, translating to
a more modest reduction on a US dollar basis.
Credit loss expense was 48 million, an 8 basis point cost of risk on an average loan portfolio of 245 billion. This
included Stage 3 charges of 54 million, again predominantly from Credit Suisse exposures.
Reflecting on developing macroeconomic events, we currently assess that exposures to our more tariff-exposed
corporate clients within our Swiss credit book are well-contained. On this basis, for full-year 2025, we continue to
expect P&C’s CLE to be around 350 million.
This said, we’re closely monitoring US trade policy developments and their first- and second-order impacts on our
Swiss loan exposures, thereby intending to update our credit loss expectations and allowances as and when
appropriate.
P&C’s operating expenses in the quarter were 1.1 billion, down 4%.
Slide 12 – Asset Management
Moving to slide 12. Asset Management drove a pre-tax profit of 208 million, up 15% year-on-year, with disciplined
cost management more than compensating for lower revenues.
Net management fees declined by 4%, as the effect of higher average invested assets was more than offset by
margin compression from clients having rotated into lower-margin products over recent periods. This said, we’re
gaining traction in delivering differentiated and higher margin products, including in our Credit Investments Group,
and in UGA, which saw strong net new commitments in the quarter and invested asset growth of 13% compared
to a year ago.
Performance fees were 30 million, in line with the prior year, and with higher revenues from our credit capabilities.
Net new money was positive 7 billion, with strong flows in money market and active fixed income, as well as
sustained demand for SMAs, which saw inflows of 4.5 billion this quarter.
Operating expenses were 10% lower as Asset Management re -tools for growth by continuing to make strong
progress in streamlining its infrastructure and operating model.
9
Slide 13 – Investment Bank
On to slide 13 and the Investment Bank.
In the IB we delivered pre-tax profit of 696 million, up 72%, and a return on attributed equity of 16%, all while
absorbing incremental RWA from the implementation of the final Basel III FRTB rules.
Revenues increased by 24% to 3 billion, driven by Global Markets, which posted its best quarter on record.
Banking revenues decreased by 4% to 564 million, broadly in line with the fee pool. While the market environment
weighed on our Banking results across products and regions, and despite growing economic uncertainty, our
pipeline continues to build. We remained top 10 in announced M&A and saw continued momentum in our
mandated deal book.
In Advisory, top-line growth was 17%, while Capital Markets revenues declined by 13%, mainly due to softer
sponsor activity. In the Americas, the mix within the LCM fee pool shifted towards corporates and away from
sponsors, where we’re more concentrated. In ECM, although the 1% revenue decrease outperformed the fee pool,
we remain focused on our pipeline build, which is expected to yield meaningful returns over the medium-term.
Regionally, APAC grew its overall Banking revenues by over 70% compared to the prior year quarter and delivered
its best first quarter on record in M&A.
Revenues in Markets increased by 32% to 2.5 billion. Against a market backdrop of elevated activity and volatility
in Equities and FX, where our IB is more concentrated, we capitalized on the enhanced capabilities acquired with
Credit Suisse and our multi-year investments in technology.
We saw increases across all regions, with the Americas, APAC and Switzerland each delivering their best quarterly
performance on record.
Equities revenues reached a new high, driven by Equity Derivatives, with increases across all regions and supported
by Cash Equities and Prime Brokerage. FRC increased by 27%, primarily driven by FX.
Operating expenses rose by 14%, largely reflecting increases in personnel expenses.
Slide 14 – Non-core and Legacy
On slide 14, Non-core and Legacy’s pre-tax loss was 200 million with 284 million in revenues.
Funding costs of around 130 million were more than offset by revenues from position exits, particularly in structured
products. This included the expected gain of around 100 million from closing the sale of Credit Suisse’s US
mortgage servicing company announced last year, which also eliminates run rate costs of around 100 million per
annum.
Operating expenses were down 38% year-on-year and 12% sequentially, as NCL continues to make excellent
progress in driving out costs.
10
For the remainder of the year, we expect NCL to generate an underlying pre-tax loss, excluding litigation, of around
1.7 billion, including revenues of around negative 300 million, mainly from funding costs. Revenues from carry,
continued exits and remaining fair value positions are expected to net around zero, and underlying operating
expenses should average around 450 million per quarter.
While the current environment may slow the pace of exits, it is unlikely to materially affect the financial performance
of our NCL portfolio. As examples, hedges in the macro book, and the nature of our now much smaller credit book,
render the valuation of both portfolios less susceptible to market volatility.
Slide 15 – NCL run down continuing at pace
Now onto Slide 15. Since the second quarter of 2023, Non-core and Legacy has freed up almost 7 billion of capital,
reduced its cost base by over 60% and closed 74% of the 14 thousand books they started with.
As of the end of March, risk-weighted assets in NCL were 7 billion lower than in the prior quarter, as position exits
across securitized products, credit and macro more than offset the inflationary effects of the final Basel III standards.
Again this quarter, the skillful expertise of the NCL team has kept us well ahead of our de-risking schedule. Given
this accelerated progress, we’re upgrading our ambitions and now aim to drive NCL’s credit and market risk RWA
below 8 billion by the end of 2025, and to around 4 billion by the end of 2026.
While we expect the reduction in balance sheet to continue to contribute to NCL’s cost performance, as I’ve
highlighted in the past, further savings from technology, real estate and resolving ongoing litigation matters will
take longer to achieve. This underpins our 2026 exit-rate cost guidance I offered last quarter.
With that, let’s open for questions.
11
Analyst Q&A (CEO and CFO)
Jeremy Sigee, Exane BNP Paribas
Good morning. Thanks very much. Firstly, just a basic one. The fact that you're accruing the whole of the 2025
share buyback suggests that you intend to do that almost regardless of what the draft rules look like when
they’re published in June. Is that a fair interpretation?
And then my second question is a bit broader. Could you talk about how your wealth management clients in
different regions are reacting in April post the tariffs in the US? Are they doing more with the bank or less with
the bank? What are their risk appetites? If you could talk about that, that would be great. Thank you.
Sergio P. Ermotti
Thank you, Jeremy. No, it is not a fair representation considering what I said, that our language hasn't changed
and we said, very clearly that we are accruing based on what we know and we see today, based on our strong
performance, based on our strong capital position. That, of course, all of this is subject to us continuing to
develop, well, in terms of financial targets, the integration, and as we pointed out, any material and immediate
change in the regulatory regime.
So, in respect of the activity in April, I can only say that of course, we had a, as I mentioned in my remarks, we
saw a huge spike in client activity and volatility in the first couple of weeks in the first few days of April. So,
even achieving a 30% increase compared to the peak of COVID times, which is quite exceptional. But it's fair
to say that if you look at the last 10 days or so, there is a fatigue coming in. You'd see it also in financial
markets. I think that markets are stabilizing around current levels across many asset classes and it's much more
of a wait-and-see attitude and so in that sense it's a more normalized environment.
Jeremy Sigee, Exane BNP Paribas
Thank you.
Giulia Aurora Miotto, Morgan Stanley
Yes. Hi. Good morning and thank you for taking my question. So, the first one, I was surprised to hear that
there is re-leveraging in Asia. That's quite a positive development. And I was wondering if that has carried
through also in April or was it only a Q1 phenomenon, and then got shutdown by the tariff discussion.
And then the second question instead, of course, I have to ask on capital, and May is the next catalyst there, or
at least we will learn something there. Is there any development that you can share with us in terms of what to
expect, and what will go under government ordinance, what will be put to parliament, yeah, any updated
thoughts would be helpful. Thank you.
12
Sergio P. Ermotti
Let me pick up the second one, and Todd will pick up the first question. There are no developments other than
the updated timeline for the announcement of the proposal that are now seen, are going to come in during
the first week
[edit: weeks]
there is any split between ordinance or legislative process. So, we are in a wait-and-see and we will see like
everybody in five to six weeks' time.
Todd Tuckner
And Giulia, I'd say it's helpful to step back and look at the bigger picture here, on the lending question. I mean,
clearly for GWM, one of our strategic imperatives is to grow lending, albeit selectively and profitably. And as a
driver of enhanced relationship revenues for clients, so we're pleased with the developments that we saw in
1Q. I mean, we can't speculate on where things are going to move given the current environment for sure. But
we're pleased with the 1Q performance, and that still remains a strategic focus for us.
Giulia Aurora Miotto, Morgan Stanley
Thank you.
Kian Abouhossein, JPMorgan
Yes. Thanks for taking my questions. I wanted to come back to US wealth management. If you could maybe
run – you clearly have done some strategic changes around the US wealth management business, both on
compensation, but also incentives, et cetera. And if I look on a year-end basis versus now, you have reductions
in advisers. I just wanted to see where should we think adviser numbers to go to in US wealth. And how should
we think around the net new flows but also impact in that respect because you made some statements in the
last quarter that could be a deterioration, but also in terms of improvement in pre-tax margin. So, a bit more of
a holistic approach around the changes that you have done and the impact.
And then secondly, just coming back to the Federal Council report, can you just take a step back and just give
your current views around your positioning against other banks, but also potential offsets that you can think
about in order to offset some kind of additional capital requirement, even in big picture terms, if you could talk
about that?
Todd Tuckner
Hi, Kian. So, on the wealth one, let's zoom out a bit and just reiterate that we're executing at pace on our
plans and our strategy. You know, clearly, quarter-on-quarter, we could see volatility. But this said, we're
looking at our ambition to achieve, as you know, a structural mid-teen pre-tax margin. And we look at that as
a two to three-year journey.
As we zoom in, the question on really our platforms and advisers, first, I'd say our platform is stable. There's
been a broad support for our strategy, which is intended to better align advisor incentives with the strategic
goals of the firm. That's evidenced by the very strong same-store net new money we've seen, perhaps the
strongest net new money we've seen over many quarters in the first quarter.
13
In terms of the head count, I would just say that our recruiting pipeline is robust. There is some attrition that
one can expect. And in fact, we're observing across the industry, given the market dynamics of 2024 versus the
beginning of 2025 and the outlook that would create some movement across the industry in terms of advisory
repositioning. But nothing I would highlight in our own platform.
Sergio P. Ermotti
Kian, before I answer the question, can you specify what do you mean by positioning versus other banks?
Kian Abouhossein, JPMorgan
Yes, Sergio. I left it open on purpose, just to see, leaving the floor open to some extent.
Sergio P. Ermotti
Okay.
Kian Abouhossein, JPMorgan
To see what – yeah, what you can tell us and your thoughts about it, because it is clearly a very open question.
It's very difficult for us to look through as well.
Sergio P. Ermotti
But you know, Kian, the call is scheduled to and at 10:30, so I'm not so sure I have so much time to go through
that. So, but so the issue is very clear that, when I look at the regulatory framework in Switzerland, it's one of
the most demanding. And particularly after we fully implemented Basel III, I think that in terms of relative
game, that we are comfortable at, that we have a strong and demanding regime. That capital and strength is
one of our key pillars.
Having said that, we all know that there is a point in time in which too much is not necessarily positive. And
therefore that's the only consideration I can say when we speak about relative terms. So, because at the end of
the day, as we always say, we are not only competing in terms of return on capital, but we are also competing
for capital. And therefore, having an attractive, sustainable business that also delivers appropriate return is a
key element on judging and balancing any regulatory regime. That's what I can say.
So, in respect of set of measures, the set of measures can only be decided and analyzed when you know what
is the outcome. And so, we will need to assess exactly what the proposal is in terms of impact and timing.
Kian Abouhossein, JPMorgan
And Sergio, just very quickly, do you expect enough clarity to assess with that report?
Sergio P. Ermotti
I hope, I don't expect.
Kian Abouhossein, JPMorgan Securities
Okay. Thank you.
14
Stefan Stalmann, Bernstein Autonomous
Hi. Good morning. Thank you very much for taking my questions. I have two on capital, please. The first one
on the parent bank, the fully loaded CET1 ratio was I think down by about 60 basis points during the quarter.
Was there anything particular to highlight that happened during the quarter?
And the second one, a bit more, let's say, strategic. The risk density in the group has actually come down quite
a bit. And it's now a bit below 31%. And I think the hope was always in a way that Basel IV would kind of lift
this risk density towards 35%, where it doesn't matter anymore whether leverage or risk-weighted assets drive
your capital requirement. But now it's 31%, it looks like you're quite deeply constrained by leverage, not risk
weighted-assets going forward. Do you expect this to change at all from what you can see? And if not, does it
have any impact on the way that you run your capital management going forward?
Todd Tuckner
Thanks. Thanks, Stefan, for those questions. I appreciate you bringing those up. So, first on the capital, the
parent bank quarter-on-quarter reduction, as I mentioned in my comments comes from the accrual of a
dividend that we expect to pay in 2026 in relation to 2025, overall earnings of the parent bank. So, it's a
dividend accrual that effectively drove the capital ratio within our guidance.
On the second one, it's a very good spot on your point about risk density coming in. You know, I would say,
you're also right where I would say more constrained by leverage than risk weighting. But remember that we
set our CET1 capital ratio on a risk-weighted basis as our key target. So, in that sense, that becomes for us
binding unless truly leverage becomes binding.
But to answer your question about what you can do about it or what the cause was or is I would say that, you
see how we've been able to really drive down RWA because of the technical nature of it, in the way we've
been able to manage down work…also work to get approvals on models, on methodology, on data quality, on
all the issues, the coverage of external ratings, all the things that have helped us drive down.
I think the leverage ratio, unfortunately, is just more simple, less fertile ground for optimization. And so, you
saw, as I commented that we had the SACCR increase, whereas on RWA we had a more fertile ground to
optimize. So, I think your observation is correct, but I don't see it this time given we intend to operate with a
CET1 capital ratio of around 14%, which for us is binding, even though you're right, leverage is – we have less
cushion on the leverage side than we do on the risk-weighted side going.... Nothing is changing as we move
forward. That's the way we're thinking about it.
Stefan Stalmann, Bernstein Autonomous
Okay. Thank you very much.
Benjamin Goy, Deutsche Bank
Yes. Hi. Good morning. Two questions, please, from my side. First on your India partnership, maybe you can
comment a bit more broader on the onshore, offshore dynamics we should expect in emerging markets going
forward, even in a large market like India, you have to do a partnership.
15
And then secondly, markets are now pricing in again, negative rates in Switzerland. Just wondering, short-
term, any impact or, below zero, if there's not much like an incremental negative impact. The longer-term
question is the 50% cost to income ratio target in your Swiss business was, I assume done or based on a more
positive interest rate outlook and how do you intend to achieve that or is more due to come out on the cost
side? The longer-term question is the 50% cost to income ratio target in your Swiss business was, I assume
done or based on a more positive interest rate outlook and how do you intend to achieve that or more due to
come out on the cost side? Thank you.
Todd Tuckner
Yeah. Hi Benjamin, let me address the second question. So, on your observation regarding the market pricing
and negative rates, as we indicate in our interest rate sensitivity and as I've commented before, we certainly see
convexity in the movement of rates either down or up, in the sense that whether rates move into negative
territory or move up, that would be accretive to our net interest income in our P&C business. So, in that sense
to the extent that is priced in and to the extent that actually happens, we see upside in our NII.
You asked about the expectation on the cost/income ratio targets that we have by the end of 2026. I would
say it's we continue to execute against that expectation. That is our expectation at this stage. Not changing
that given interest rate expectations at this point in time.
Sergio P. Ermotti
So, on India I think that we see a secular trend developing for the Indian market domestically and but also at
the same time, we see also an opportunity for India residents booking business outside. And looking at our
current setup, we saw that, we decided that the best way to pursue the next phase of growth and growth
opportunities in India for us was to partner with the only fully independent asset gatherer in India. And so
through that, through the combination of us buying a stake, but also bringing our current business into 360,
we can now leverage for the future.
So, we see very good prospects across the board in terms of not only sharing our best practice globally, but
also learning on the domestic markets. And we'll take it from there. So, I think that we are very optimistic
about the long-term potential growth in India.
Benjamin Goy, Deutsche Bank
Thank you.
Amit Goel, Mediobanca
Hi. Thank you. And maybe just more of a follow-up question, but just the remarks earlier about the equity
double leverage and kind of looking to get down to the 110% at Q2. And then continue to bring it back to
pre-acquisition levels in the quarters after. I'm still kind of curious, why? What drives the pace of that, and kind
of, what's the cost or what's the consequence if you were to stay at 110%? Because let's say if the group were
to have less leverage at the parent bank level, what would stop the group having a bit more leverage at the
group? And what would be the consequence, or what is the benefit of bringing that down from 110% to say
105% or 100%? So, that's the question there.
16
And then just on the PCB business, again I appreciate the response on if rates, for example, if they were to go
negative, et cetera, the convexity. I'm just wondering what you're thinking about volumes there given the
exchange rate movement. Any color would be helpful. Thank you.
Todd Tuckner
Thanks, Amit. So, on the first, your question in terms of the consequence of a higher one or the benefit of the
lower one for sure, the way we look at it is a lower one, which is to say our pre-acquisition levels, the way
we've historically operated. One is more prudent. It's aligned with our strategy. And third, it just offers far more
flexibility. So, if you operate at a higher level and then you hit any stress, then you've effectively sold your
buffer, and so that's the reason why it's prudent to operate at the levels that Sergio and I have been
highlighting over the last quarter or two, since I raised the topic last quarter.
In terms of P&C volumes. As we look, we look forward, I would say, at this point, the outlook on lending is
flattish for now in terms of volumes and ways that if that is a mitigant for sure, the balance sheet optimization
that they've done, that the business has done on the asset side, has driven profitability, return on attributed
equity, revenue over RWA, accretion, appreciation. So, I would say that's the main focus on the lending side.
Deposit outlook is also relatively flattish, maybe some short-term moderate down a bit in a very competitive
market and we're not chasing where we're seeing competitors buying deposits at much higher rates to protect
their loan books. So, our deposit outlook is stable, I would say. But again, there we have adjusted deposit
pricing on select products to help. But at the end of the day, as I've said before, certainly the biggest help
would be rates either moving down or up from a sort of a zero perimeter as that would really be the most
accretive from a NII perspective in the P&C business.
Amit Goel, Mediobanca
Thank you.
Andrew Coombs, Citigroup
Hi. Good morning. I have two follow-ups, please. One on capital and one on GWM NII. On capital, coming all
the way back to Jeremy's first question, you've taken a change in approach. You've fully accrued for the
buyback rather than taking the capital impact as and when you execute. And can I just ask what was the
rationale for doing this? And is this something you envisage doing going forward, as well?
And the second question on GWM NII, and I think at the full year results, you talked about Q1 being down
low- to mid-single digits sequentially. You've ended up down 7%. And you said that 1 percentage point of that
was due to the re-segmentation. But nonetheless, it looks a little bit worse than your original guidance. So,
perhaps you could explain why it came in slightly worse than you initially expected?
And then more broadly, your full year guidance for GWM NII is unchanged. But it was previously predicated on
the second half being flattish versus the first half. Are you now seeing a slight recovery in the second half?
Sergio P. Ermotti
So, thank you, Andrew. So, on capital, again, I think that's, the main driver here is to also manage our ratio in
respect of our guidance. And by doing the accruals, we basically take it closer to our “around 14%.” But most
importantly, I think that's the real factor that has changed is that we moved from having an ambition to having
an intention to.
17
I mean, this is all still subject to the conditions we always set in terms of financial performance. And also, no
material and immediate change in the regulatory framework. But it's clear that now we have – because of the
results and the progress we are making in the integration, and everything that we can control, we feel
comfortable that this is the way to go.
So, you can always expect that as soon as we feel that there is a change between ambition and intention, also,
from a accounting standpoint of view, we will accrue in a prudent manner which we believe is also more
prudent – that kind of reserve, then in order to then execute on capital return plans.
Todd Tuckner
And Andrew, on the second question. Yeah, the reason I gave some color on the segmentation change is, is
just to explain a bit of the delta. But with that explained, you kind of get into the mid-single-digit range, which
is where we've guided into 1Q sequentially from 4Q.
In terms of the outlook, going forward, you're right. I mean, I'm reaffirming the full year NII guidance for
GWM. I see the loan outlook to be, again, dependent on the rate environment, but the loan outlook to be
positive, also dependent on the macroeconomic environment. But that right now, until we see any drastic
change, the loan outlook has been accretive on the NII in terms of the rest of the year for GWM.
And also, the deposit outlook is helping as well, again, subject to macroeconomic developments. But we also
see some of the preferential FTD headwinds tapering. And so ultimately this is contributing as well to deposit
margins increasing. So, for those reasons, I've kept the guidance stable for the full year. And as I said, offered
the explain to sort of move into the Q1 guidance range.
Andrew Coombs, Citigroup
That's great. Thank you, both.
Chris Hallam, Goldman Sachs
Yeah. Good morning, everybody. Thank you for taking my questions. You mentioned in the prepared remarks
the LCM fee pool shifted towards corporates and away from sponsors. Any insights you can share on your
discussions with the sponsor community more broadly, how do you expect them to act in the coming quarters
based on the operating backdrop we see today? And maybe at what point would you consider reassessing the
banking revenue ambition for 2026? I guess, in light of the slower activity levels year to date?
And then second, I just want to come back on this risk of an immediate and material change to the regulatory
regime. So, I appreciate the processes is maybe less clear than it was, the range of outcomes has probably
widened, but has the risk of immediacy also increased? It feels as though, if anything stuff is being pushed to
the right a little bit, and obviously there hopefully would be still some kind of phase in period, one would
assume, so just any thoughts on that. Thank you.
Sergio P. Ermotti
Well, look, I think that generally speaking it's… On a year-on-year basis, the drop in the sponsor-related activity
was more important, but I would say that in general, the sponsors are also like everybody on a wait and see
attitude. A lot of transactions are on hold. They are not necessarily being canceled. Of course, if you look at, to
some extent the view levels of funding and spreads and credit markets may put some transaction at, in
question. But, generally speaking the sense is that people are waiting to see if the situation clarifies in the next
couple of months and then they're going to go into executing on plans for either add-on acquisitions or
disposals, IPOs. So, I think that the most important issue that we see right now is that the pipeline of potential
transaction is still healthy and building up. So, we don't see a stop on that.
18
So, coming to your question, I think that when we would change our outlook for the over-the-cycle and
ambitions on the top line is going to be when, if, we have a material change in the market conditions and in
the prospect for the growth of banking businesses in the industry. Our intention to be a relative winner out of
it by gaining share of wallet remains unchanged. So, if we have to change our revenue assumptions, we're
definitely not going to change our market share ambitions to improve and monetize on the investments we did
on the platform in the last 24 months.
In respect of the second one, I mean, look, it's just prudent – we are not in control of this process. We don't
know what's coming out. And so, we can't rule out anything in terms of the materiality of the change, and the
timing. Therefore, you have to interpret this language more as a prudent way to highlight that we are – that
that's a possibility, that doesn't necessarily reflect what we expect or don't expect.
Chris Hallam, Goldman Sachs
Okay. Thanks, Sergio.
Piers Brown, HSBC
Yeah. Good morning. I've got two. One on FRC, so up 27% year-on-year. It's much stronger print than a lot of
your peers. And I'm just wondering, is that business mix related? You've mentioned the strength of FX, or do
you feel that you're still winning back market share in that business?
And then the second question, sorry to come back on capital again, but you did say in the fourth quarter that
you had further subsidiary repatriations potentially in the pipeline. I think you mentioned $5 billion from CSI
and maybe something more coming out of the IHC. Can you give an update on progress on both of those
fronts? Thanks.
Todd Tuckner
Hi, Piers. So, on the first question, yeah, the pickup in FRC year-on-year was driven by FX where we're strong,
concentrated. You know we had… it was a difficult quarter, I think for those that are more in rates and credit.
And we're, as you know, under concentrated there, so we didn't have that impact, so we benefited from
where we were well indexed in the FRC segment.
On the capital question, in terms of an update, yes, you recall correctly that there remains additional capital to
be repatriated out of some of the foreign subs, in particular the UK one. And a bit more as well in the US.
We're going through the normal process with the regulators to approve the release of their capital, which is to
say that we continue to work down the portfolios, largely non-core and legacy portfolios, in those entities. And
as we continue to make progress and that capital is indeed excess, including from a supervisory standpoint,
under their conservative lens, they'll give us the – they’ll signal the okay and then we'll repatriate that, over the
course of the next several quarters.
Piers Brown, HSBC
All right. That's great. Thank you.
Sergio P. Ermotti
Thank you. So, there are no more questions. So, thank you for calling in and for your questions. And the IR
team is at your disposal for any follow-ups. So have a nice day. Thank you.
19
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UBS Group AG
By: /s/ David Kelly
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Name: David Kelly
Title: Managing Director
By: /s/ Ella Copetti-Campi
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Name: Ella Copetti-Campi
Title: Executive Director
UBS AG
By: /s/ David Kelly
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Name: David Kelly
Title: Managing Director
By: /s/ Ella Copetti-Campi
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Name: Ella Copetti-Campi
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Date: April 30, 2025